Palmers Solicitors

Estate planning for people approaching retirement

As the end of your working life draws closer, you may well have built up property and other assets that take you over the inheritance tax threshold, either as a result of a successful professional career or running your own business. You may also have received an inheritance from your own family.

If you have a family, your priorities are likely to be to reduce the value of your estate – to minimise your inheritance tax bill – while retaining sufficient capital and income so that you can enjoy a comfortable standard of living in retirement.

Your estate planning could include…

  • Making a will, if you have not already done so. Surveys regularly suggest that between 50 and 60 per cent of UK adults do not have a will in place, with the potential to cause loved ones significant stress and expense in sorting out their affairs after their death.
  • When you make a will, you could consider making a gift to charity as part of your inheritance tax planning. If your estate is worth more than £325,000 – the inheritance tax (IHT) threshold – you can reduce the IHT rate payable from 40 per cent to 36 per cent by leaving a gift of sufficient size to charity.
  • Inheritance tax planning has potentially been made more complex by the phased introduction of a new main residence nil rate band from 2017. This will reach £175,000 by 2020-21 and will sit on top of the main £325,000 allowance but it can only be offset against the value of a person’s home when it is left to children or grandchildren. With the rules potentially meaning that a married couple with no children could pay more IHT than their friends whose estate is more valuable, but who pass it on to children or grandchildren, professional advice on IHT will be more important than ever.
  • You may wish to take steps to protect your home and other assets in case you or a partner need long-term residential care in the future. There are various options for doing this, so that you do not pay more than necessary for care, but the rules are complex and expert advice is recommended.
  • Whether or not you have children, it is important to make arrangements so that someone you trust – a family member, a close friend or a professional adviser – can make decisions regarding your property and finances or your health and well-being, should you lose capacity to do so for yourself in later life. A Lasting Power of Attorney will allow you to appoint people with the legal authority to do so, but must be set up before you lose capacity.

For more information on our estate planning services, please contact us.